Rideshare and Gig-Economy News

Uber gives up fight over unemployment insurance decision

For the past three years, Uber has been locked in a dispute over whether it is obligated to contribute to unemployment insurance payments that the state’s Department of Labor decided were owed to three former drivers. Last month that fight came to an end: Uber dropped its appeal of the original decision, which had been upheld twice in the past two years.

The original finding, and the decisions that supported it, stated that the ruling applied not just to the three drivers, but also to all those “similarly situated”—language that threatens a business model built on classifying drivers as independent contractors not entitled to benefits.

But while Uber lost this battle, it is not at entirely clear what that loss will mean.

“We are now waiting on the NYS Department of Labor to make good on their promise to audit Uber to determine how much the company owes the state in unemployment contributions,” said Nicole Salk, an attorney at Brooklyn Legal Services, in a statement issued today with the New York Taxi Workers Alliance.

The two groups, which have been fighting Uber together, have been waiting on the Department of Labor since Feb. 8, when Uber withdrew its appeal of the decision.

If the Department of Labor does not set policy on how much Uber is required to contribute for unemployment insurance, drivers will be back where they were: pushing for benefits on a case-by-case basis.

“The Department of Labor needs to do the right thing and get Uber to contribute its fair share and not make these individual Uber drivers go through all kinds of hoops” to get their benefits, Salk said in an interview.

The Department of Labor did not respond to requests for comment.

Uber says it withdrew its appeal because the decision is not as far-reaching as it sounds.

“We disagree with the decision but have decided not to further pursue an appeal because this case only relates to three drivers,” a spokesman said in a statement. “Multiple federal courts have deemed black-car drivers—which include Uber driver partners—to be independent contractors.”

Salk responded that the black-car decision does not apply to the issue of unemployment insurance.

The Department of Labor and the Unemployment Insurance Appeals Board both found that when it comes to unemployment benefits, the issue is who is controlling the relationship, she explained.

“If you look at this decision, they found that these claimants are employees because Uber has most of the elements of control in the relationship,” Salk said. “They are supervised by the app.”